Roth Steel Tube Co. v. Commissioner
United States Tax Court
Petitioner was the largest creditor of American, a company which was experiencing financial difficulties. In order to enable American to avoid bankruptcy and continue its business, petitioner and several other large creditors agreed to cancel portions of their past due balances receivable. At about the same time, petitioner acquired all of the outstanding stock of American.
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Petitioner was the largest creditor of American, a company which was experiencing financial difficulties. In order to enable American to avoid bankruptcy and continue its business, petitioner and several other large creditors agreed to cancel portions of their past due balances receivable. At about the same time, petitioner acquired all of the outstanding stock of American. Thereafter, petitioner wrote off as a bad debt approximately 50 percent of the old account receivable balance from American. Held: The disallowance of petitioner's addition to its reserve for bad debts is sustained.…
1Opinion of the Court
Dawson, Chief Judge:
Respondent determined a deficiency of $85,755 in petitioner’s Federal income taxes for the taxable year ended April 30, 1972. Such deficiency resulted from the disallowance of petitioner’s claimed addition to its bad debt reserve in the amount of $178,656. The two issues presented for decision are:(1) Whether petitioner properly charged its reserve for bad debts in the amount of $172,443 in connection with the partial writeoff of an account receivable from a debtor corporation which was acquired as a subsidiary by petitioner.(2) Whether an additional amount of $6,213 is…
2Cases cited10 opinions
- Krim-Ko Corp. v. CommissionerUnited States Tax Court · 1951
- Pachella v. CommissionerUnited States Tax Court · 1961
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Paramount Liquor Company v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1957
- American Felt Co. v. BurnetCourt of Appeals for the D.C. Circuit · 1932
5 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Roth Steel Tube Company v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1980
- Valmont Industries, Inc. v. CommissionerUnited States Tax Court · 1980
- Roth Steel Tube Co. v. CommissionerUnited States Tax Court · 1985
- Intergraph Corp. v. CommissionerUnited States Tax Court · 1996
- Jostens, Inc. v. CommissionerUnited States Tax Court · 1989
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